Losing Territory: The Effect of Administrative Splits on Land Use in the Tropics

Elías Cisneros (), Krisztina Kis-Katos and Lennart Reiners ()
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Elías Cisneros: University of Texas at Dallas
Lennart Reiners: Asian Development Bank

No 708, ADB Economics Working Paper Series from Asian Development Bank

Abstract: State decentralization is often promoted to improve public service delivery. However, its effects on forest conservation are ambiguous. Decentralization might not only improve local forest governance, but also change the incentives to promote agricultural expansion into forests. This study focuses on the power devolution caused by the proliferation of new administrative units in Indonesia. The discontinuous changes in government responsibilities at new administrative borders provide exogenous spatial variation to study forest outcomes. Using a spatial boundary discontinuity design with 14,000 Indonesian villages, we analyze the effects of 115 district splits between 2002 and 2014. Results show a 35% deforestation decline within new districts relative to existing districts both immediately before and after splits. In pre­split years, this can be explained through agricultural divestment by existing districts on territories that will be lost. In post-­split years, the short-­term forest conservation benefits seem to be rooted in temporary administrative incapacity to attract agricultural investments.

Keywords: deforestation; decentralization; environmental protection; Indonesia; spatial RDD (search for similar items in EconPapers)
JEL-codes: H77 O13 Q15 Q56 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2023-12-15
New Economics Papers: this item is included in nep-agr, nep-dev, nep-env and nep-sea
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